Federal budget a swing and a miss

This column by Armine Yalnizyan was originally published by the Toronto Star on Wednesday March 29, 2023. Armine is a Contributing Columnist to Toronto Star Business featured bi-weekly.

What happened to Canada’s first self-declared feminist government? The one that promised to help the middle class and those trying to get into it, and delivered? The one that had our backs during the pandemic?

After a year of scorching inflation not seen in 40 years, and with the threat of recession looming, we desperately needed that government back in action.

This fall, when we thought they’d show up again, Canada’s first female Finance Minister Chrystia Freeland said it was time to keep their powder dry. That meant: “we’re not spending.”

The powder was prudently deployed Tuesday. It’s cold comfort that federal spending will decline as a share of GDP over the next five years. There will be $43 billion in new spending over the next six years, but it’s mostly not focused on challenges faced right now by Canadians. Its focus is on the future.

Budget 2023 addresses the need to transition to a clean energy economy with more vigour than making sure Canada’s most vulnerable are assured of food, housing, and care.

It talked about the need for private-sector investments more earnestly than the need to get EI recession-ready.

A section titled Investing in Canadian Workers itemized a long list of male-dominated jobs — construction workers, skilled tradespeople, mechanics — but not one female-dominated job. (No, new health and child care transfers don’t “fix” escalating labour shortages, because there’s no prioritization of that problem.)

Every one of these choices once again ignores the basics women still struggle with, after the world’s first-ever she-cession; and notwithstanding the fact that women are now working more than ever.

Budget 2023 mentions “minerals” and “electricity” more than it mentions “women.” It mentions “investments” more than “workers.” It pays less attention to current economic insecurity than creating a future that attracts more private sector capital.

As $20.9 billion in supports for investors firing up clean technology were announced ($80 billion over the next decade, a timeline that eclipses this budget’s horizon), workers can count on a whopping $107 million over the next 5 years. That’s not a typo.

What labour shortage? What incoming recession?

There is an offer of $5.4 million (again, not a typo) to expand access to worksharing agreements. This could have been a great story, even if it fell short of major EI reforms, like reducing the number of hours worked required to trigger eligibility for jobless benefits.

That’s because of labour shortages. Employers are hoarding labour because workers are so hard to find. More are cutting hours rather than laying people off. That helps them balance their books, but makes it harder for workers to make ends meet.

I recently spoke to a woman who is living on 30 per cent of their usual hours, for an unknown period of time. Her food, gas and shelter costs have not taken a break from their upward climb.

Worksharing could have been a timely and targeted solution to the new way the recession — the one virtually all economists say is coming our way — could unfold: not with higher unemployment, but with lower hours and smaller incomes.

It certainly could offer more help than the thin gruel this budget offers on the affordability front, which comes through two major channels:

  • The so-called “grocery rebate” which is simply the extension of the GST credit (reaching 11 million people, the poorest quarter of Canadians). Maximum help is extra $234 for a single person with an income of less than $10,000. (Don’t spend it all in one place!)
  • The Housing Benefit, which offers one-time assistance of $500 in assistance to those whose spend 30% or more on housing out of households with incomes under $30,000. While booked to cost the public purse $1.2 billion as of this week only $325 million was spent on 659,000 applicants. Applications for help will no longer be accepted after Friday, March 31. Why?

There was nothing about a school food program. It is in the mandate letters of the Minister of Agriculture and Children, Families.

There was nothing to help food banks and shelters deal with soaring demand and plunging donations, as Ottawa did early in the pandemic.

There was nothing to offset the rising costs of financing affordable rental housing construction, due to central bank actions, which means the already totally inadequate supply of new builds is stalling out.

It’s understandable that Canada needs to catch up with Joe Biden’s Inflation Reduction Act, a strategy that aims to pivot to a more sustainable energy base and re-shore more jobs to America. But, weirdly, Canada’s version is less feminist.

The Biden plan requires companies benefiting from government support to offer good wages, and child care. Canada includes the good wages part, but excludes the child care.

You may think we’ve dealt with it already. Though costs are down for licensed spaces across Canada, thanks to historic bilateral agreements signed with the provinces and territories last year, low wages and lack of benefits for early childhood educators are causing workers to leave the field.

We have spaces without workers. That’s a tragedy, in an era of labour shortages unseen for half a century. We need all hands on deck.

We see again, as in the pandemic, the choke point for expansion is the care economy. These workers go to work so we can go to work. And without them, it’s primarily women who will provide the unpaid care, sapping the growth and productivity that every budget tells us is the most pressing issue for everyone’s future.

Sadly, Budget 2023 failed to read the room. It certainly missed most of the women in the room. And that’s not we expected from the most feminist — and one of the most progressive — governments Canada has ever had.